Chrome smuggling rejudicing the state of millions

A complex syndicate involving some Chinese nationals and senior government officials is at the centre of chrome smuggling in Zimbabwe through under declaration of volumes, which have prejudiced the state of millions of dollars in taxes and mining fees.

Chrome is one of the country’s main mineral exports after gold, Platinum Group Metals and diamonds.

Information gathered by this paper shows that some large scale chrome miners are working with officials from the Zimbabwe Revenue Authority (Zimra) and Minerals Marketing Corporation of Zimbabwe (MMCZ) in facilitating under-declared ore beyond the country’s borders before shipment to target markets such as China and India.

The chrome that is being declared at various weigh bridges owned by MMCZ across the country does not tally with the volumes of chrome exported through the borders and the state-owned minerals marketer recently received reports of a possible rampant smuggling of chrome through under-declaration.

“The country has been losing millions through this cartel of chrome smugglers who are working with Zimra and MMCZ officials. This has been going on for some time but no concrete action has been taken to monitor how much chrome goes through weigh bridges and how much is then declared to the Reserve Bank of Zimbabwe through CD1 forms,” the source said.

“MMCZ just recently received reports of chrome that was being smuggled through the border especially the Forbes Border Post. This cartel has mainly been driven by Chinese that are into small scale chrome mining.”

The involvement of the Chinese in smuggling is a stab in the back for Zimbabwe which has rolled out a red carpet for the Asian giant under the guise of it being an all-weather friend.

The continued smuggling of chrome has pushed MMCZ to set up more weigh bridges across the country to curb this scourge which also involves senior bureaucrats.

Mines and Mining Development Minister Winston Chitando said he had not yet received a report on smuggling but urged those with information to come forward.

Chitando’s comment comes despite recent reports that a Mutare-based official was in February arrested on allegations of attempting to facilitate the smuggling of a truckload of chrome ore to Mozambique. The chrome intercepted had a value of roughly US$25 000.

“My office has not yet received a report on chrome smuggling but I urge those with information to come forward,” Chitando said. MMCZ could not comment on the matter.

“Even more pressing is the predatory domestic chrome buying which is taking place across our great Dyke. Foreign based companies have opened local companies here in Zimbabwe to buy chrome locally and have abused our system by operating as a cartel to force prices as low as $15 USD per tonne. For reference the export price of chrome ore is $80USD per tonne,” said Zimbabwe Chrome Miners Association executive member Masango Mahlahla.

He said the chrome buying cartels are effectively taking all of the profits from mining chrome out of Zimbabwe and leaving small scale chrome miners heavily under capitalized.

“The predatory low chrome buying prices result in low taxes due to government as taxes are calculated based on the buying price.

“This comes at a bad time for our mining industry as well as our government, as our nation needs to generate more revenues in foreign currency. At the moment these foreign based companies operating as cartels are selling their foreign currency on the parallel market and purchasing chrome in Rtgs at predatory prices,” said Mahlahla.

On the side of Zimra, its officials are accused of being complicit in carrying out export duties while issuing fraudulent bills of entry.

A World Bank report, The Changing Wealth of Nations 2018, documents Africa’s impoverishment by the rampant extraction of minerals, oil and gas.

In the report, the bank concludes that sub-Saharan Africa loses about US$100bn worth of adjusted net savings annually through massive looting of minerals.

It said “the only region with periods of negative levels — averaging negative three percent of gross national income over the past decade — suggesting that its development policies are not yet sufficiently promoting sustainable economic growth and clearly, natural resource depletion remains one of the key drivers of negative adjusted net
savings in the region”.

“Its true that chrome is leaving our borders unaccounted for; several trucking incidents have been reported at the borders of chrome leaving without proper documentation, This is an area government must look into to curb major losses,” said small scale chrome miners representative and Zimbabwe Miners Federation vice president Lindi Mpofu.